I am under contract for a community in Texas and going through the loan process. The loan officer says the funding lender will almost certainly require me to pay for an insurance policy that protects me (and the lender) against any toxic hazards. They do this in lieu of a Phase 1 report when they think the property is reasonably safe.
Is this legit and has anyone else experienced such a thing? I remember at the last MHM the speakers saying you had to do a Phase 1 to protect yourself but does this “insurance policy” work equally well? The policy should cost around $500 vs. $2,000 for a Phase 1. I want to save money but I also want to CYA.
I should say the community is on top of a hill (with an honest to God view-- in Texas no less) and is about 1 mile from any commercial or industrial sites.